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Income and wealth inequality are different: income is contingent on conformity

In several past posts, I wondered about the debate over income inequality and in particular why it seems income is more controversial than wealth. I pondered whether income inequality is a euphemism for envy or jealousy of inequality of consumption, luxury, patience, or attention. The controversy of income inequality continues to fascinate me because I think it is a superfluous name for something more fundamental in society.

Today treats income inequality like what class inequality that I learned when I was growing up in the 1960s and 1970s. Lessons learned both in school and in the microcosm of society in the small not-wealthy town I grew up in. To me, class conflict involved inequality of wealth, not income. What mattered was the extent of ones possessions, not how quickly he obtained them. Today, we seem to have no problem with wealth. At least in my encounters with popular media, I see articles praising the wealthy and congratulating new additions to certain top-N lists of wealth as based on properties and stock holdings. Wealth is not a problem, but a virtue.

The problem is income. Our attention is drawn to the rate at which people are making money instead of the accumulation in the form of wealth. Curiously, we have controversies at both end of the income spectrum: we complain about minimum incomes as much as we do maximum incomes. We even link the controversies of minimum and maximum incomes. An implied goal of raising minimum incomes is to force corporations to reduce their compensations at the top of the income ladder.

I have no position in the debate because I don’t even understand why the debate is occurring at all. I agree with the position that the minimum wage is an unjustified interference in contracts between individuals. People should be free to enter employment contracts freely irrespective of the income involve. That freedom applies at both ends of the income scale. A person eager for some opportunity should be permitted to work for next to nothing. A company eager for some individual’s celebrity should be permitted to pay as much as required to secure the celebrity’s participation. When people are free to choose their own careers, many will not seek to be celebrities.

Our cultural attention to income is similar to our early 20th century attention to capitalism, or our 19th century attention to wealth, or our 18th century attention to royalty. Income is to our culture what religion was to 17th century European culture.

Income is not a religion, but our reaction to income is like historic cultural reactions to denominational differences in religion. I touched on this in an earlier post when I described the problem of the high income:

There is something dehumanizing about becoming a celebrity. The reward of recognition, admiration, and often wealth come at the cost of constraints on narrow options for how to live a life. Non-celebrities […] need to constrain their lives not only to devote the improving their abilities but also to avoid unrelated activities or interests that are considered inappropriate for that goal.

Part of what confuses me about the debate of income inequality is that our culture does not seem to object to celebrity incomes that are far beyond regular incomes. The widespread and diverse recognition of a celebrity grants an exemption from attention to income.

This occurs at the low-income end as well. When an individual has attained a certain recognition, we withdraw any objection about their income. It is perfectly acceptable for a highly respected individual to give his services for free, donating proceeds to charity, or working for a salary of as low as $1/year. We complain when some nobody agrees to work for those same terms.

Celebrities (by this I mean people who have broad recognition) are exempt from income judgement. Income conformity is about common people. This is similar (in my mind) to how our ancestors reacted differently to religious extremes exercised from community leaders and from commoners.

Both our ancestor’s religious leaders and today’s celebrities can get away with things that are forbidden to commoners. But there is a catch. Society will revoke this exemption as soon as the individual loses recognition as a celebrity.

When I was growing up, I read about earlier century’s kingdoms. I recall the childhood imagination about the desirability of becoming a king. The king had access to wealth, leisure, and food that far exceeded the access to commoners. Even at a young age, I recognized that I didn’t envy the king that much as modern life of even lower-middle class had luxuries that those older kings never enjoyed (refrigerators, gas stoves, 75 mph vehicles on paved roads, etc). Even within their own own, I sometimes felt sorry for royalty in that most of their luxuries were forced upon them. For example, of course they were well fed with frequent feasts, but often they had no choice to but to attend these feasts in order to maintain the social order, political alliances, or protocol. In modern times, I observe this in the British royal family being caught up in constant watchful eyes that they behave precisely as expected for their station. To a lesser (though growing extent) we see this in US politics where presidents (and past presidents) are expected to be similarly constrained to a royal-style life-style (as evidenced by the generally disappointing reaction of the retirement habits of George W Bush). I even feel some sympathy for Kim Jong-un of North Korea who despite his absolute powers gives me the impression that he would really prefer to be anywhere else but there.

Being a celebrity does grant access to privileges that come from income, but it also comes with great cultural demands that the celebrity behaves as we expect them to. It is great to become a celebrity, but one needs to learn how to enjoy it because society will demand a specific behavior for that celebrity. Misbehavior by a celebrity can result in a fall to a level more despised than having never had celebrity in the first place. Celebrities need to be very careful about what they do or what they let others know about them. In exchange they get paid very well and they are aware of the threat of consequences of their downfall.

Celebrity status involves a contradiction, especially for someone who earns celebrity status from personal achievement. Often the act of earning the celebrity status involves a combination of good skill and a unique self-expression that makes the person stand out from the others. In recent times, we talk about celebrities in terms of brands in analogy to commercial companies with brands of products. The brand is distinctive so that it has value in itself. The brand represents some idea in the public. For products, a company constantly develops and maintains the brand status to keep its attractiveness to the public. A similar dynamic occurs with celebrities where society associates a certain standard or image based on the initial accomplishment. In order to maintain the celebrity status (and accompanying benefits) the celebrity must conform to that initial image. The contradiction is that innovation that makes a celebrity possible but be abandoned in order to maintain celebrity status. The population will only allow very narrow and easily explained evolution from that initial image that made the celebrity in the first place.

A celebrity need not be an entertainment or sports star. A celebrity may be technology expert or business leader who has earned widespread respect. Once the celebrity earns that widespread recognition, the celebrity can command high wages as long as the recognition persists. One explanation of income inequality is that celebrity wages are not priced like anonymous worker’s wages. The name recognition alone commands the high wage. I argued that we should not include celebrity wages in discussions of income inequality because their wages are due to their name recognition instead of current competence. If we exclude the incomes associated with celebrity status, the spread of remaining wages is probably not as extreme.

Back to my main point about the celebrity, a person, having his name become a brand. The person must conform to that brand for the remainder of his status as a celebrity. If he strays far from society’s accepted vision of his brand, society will revoke the celebrity status and leave the person in obscurity. Being a celebrity has many advantages of being popular and well financed, but it has the downsides of not being allowed to stray from the image that society attaches to him. This is the price of income I refer to in the title.

In the past week, there was an example from the corporate world of brands that I think illustrates what happens when a company disrupts its brand image too much. I think it is a good example because it had a good intention and it would have been successful if implemented in a more obscure brand. Instead it was Starbucks, the franchise chain of coffee shops, and its innovation was to introduce a campaign to encourage discussions about race. They gave it a name of “race together”. In many ways, I think the idea had merit. In recent months, there have been a lot of controversies about race relations in the country. Also, coffee houses are not inappropriate places for discussions at least in their historical incarnation. It makes sense to encourage more conversations of controversial subjects in coffee houses. Historically, coffee houses were places that had politically energetic discussions.

I think it is a good idea. I can imagine being in the corporate planning sessions getting excited about this winning idea. The problem is that the campaign immediately and surprisingly became controversial. I watched the controversy unfold over Twitter and there were a wide variety of complaints. Lots of people were outrages for many reasons. I have an explanation that ties together all of these complaints. Again, I noted above that coffee houses are not inappropriate places to have conversations, and such a campaign may have worked for a more obscure chain. The reason this one got so controversial is because of the brand it occurred under. Starbucks is a brand that carefully presents itself as a source of good coffee. When you go there, you don’t expect a conversation. In fact, the places are usually library silent with people reading computing devices if they linger in the store at all. Also the chain has in the past made it a point to stay out of controversial subjects and focus on coffee (and associated products). This is the image they had carefully managed over decades. The brand image is one of a place with fine coffee and absent of serious or noisy conversations. The idea of fostering any conversations in Starbucks is the antithesis of its brand. Even more so is the implication that that conversation would involve the barrister. The barrister is also part of that image of the Starbucks brand. A Starbucks barrister is an expert on coffee, not a rhetorician.

I use this example because it is recent, and because the controversy really did trigger this thought about the restraint that applies to human brands, or celebrities. Once a brand is established, the brand’s value (and thus benefits) can persist indefinitely as long as the brand’s image is carefully protected and restricted from straying too far from its original image. When I talk about celebrities, I have in mind in particular senior staff in corporations who rise to high positions as a result of their widespread recognition for past achievements. We do not normally call these celebrities, but I attribute their current success to the brand they have managed to produce over time. I see little difference between them and what are more popularly called celebrities in entertainments or sports. After the initial aptitude taht elevated the individual’s status, the continuation of that status involves remaining true to that image of what got him there. The elevated position is how corporations recognize their stars. While higher positions requires some competence, the occupation of that position is strongly dependent on the individual maintaining the standing that earned his initial recognition. A surgeon that rises to a level of CEO is a surgeon who happens to be a CEO who needs to competently steer an organization without tarnishing his image as a surgeon.

I use the term celebrities to describe upper management positions in corporations to distinguish them from lower level positions. Competition for lower level positions depends mostly on capabilities. As a result, there is usually a healthy competition for these lower positions that keeps the salaries relatively constrained. In contrast, higher level positions require name recognition as well as competence where often the name recognition advantage outweighs a competence advantage as long as the competence meets some minimal standard. Higher level positions go to the most widely recognized person available who can minimally do the job instead of the person who is most capable of doing to job. Perhaps a way to explain this is that part of the job is being well recognized.

Widespread name recognition in any field is a limited resource. No matter how accomplished the population in a community is, a community will only be able to readily recognize a few individuals. Such individuals so recognized will command very high wages. The wages are due to the rare resource that is their recognition.

As long as they maintain that recognition, they will continue to enjoy the benefits. The problem is that continued recognition depends on remaining true to the original brand, maintaining the reputation that originally brought recognition. The unfortunate thing is that often the person who rises to celebrity has to retire his talent for being original once he achieves celebrity.

Again, I find the term celebrity appropriate as it reminds me of celebrities who are known to the masses only on 2-dimensional projections on screens. A celebrity loses one on the real-life person’s dimensions and all is fine as long as the 2-dimensional project is maintained. Movie celebrities often have to be very careful not to expose their other sides so that they will maintain the image their fans demand. They are forced into hiding their true more complete self, perhaps to a point where that repression may cause other problems in their lives.

A celebrity continues to earn money (income) as long as he maintains his celebrity status. Maintaining that status requires repressing the urge to grown, to do different things, to take new chances. Attempts to deviate from the celebrity image risks a very likely total loss of that celebrity status.

Our current work culture, especially in professional fields, appears to be obsessed with celebrity concepts involving networking and building personal brands. This may also be a consequence of technology and automation eliminating many jobs so that even low-level positions have just a few openings. Like in the past companies sought out widely recognized people for CEO positions, companies today are seeking out widely recognized (well-connected) individuals for leading small teams in companies or even for individual positions. I see this in computer fields where job openings for a member of the programming team where the requirements seem to be only met by the top person in that field.

At first it is easy to envy that person who is so well established in his very narrow expertise. If he finds this opening, he is likely to see a large salary increase that will continue as long as he likes. But I also see the downside. Here is a person who had a long time ago made some achievement but now must take work in the area of that achievement. He will get paid handsomely for this, but he will not have the opportunity to repeat that reward of making a new achievement in some other area that probably interests him even more.

High income is great if the fruits of that income can compensate for the required repression of the parts of a personality that don’t match the brand. On this blog, I also make theories to explain declining workforce participation. With the above discussion of how automation and technology is pushing celebrity status down to ever lower positions, a justification for avoiding work may be to avoid becoming a celebrity. Becoming a celebrity means repressing most of a person’s real self to fit in the brand of the celebrity. It is one thing to demand a coffee-house chain to remain true to a brand image of nothing-but-good-coffee. It is another to expect that kind or restraint from a talented human being.

One thought on “Income and wealth inequality are different: income is contingent on conformity”

Another summary of income costing an individual’s freedom is in the modern workplace especially for professions where the income achievement is the result of proof of what a person is capable of doing but with the immediate consequence that the employer defines the employee as the entity that is capable of doing that one thing. Poor performance reviews result when the person stops doing that one thing well, or does something that else that contradicts or undermines that one thing. Also, once the employer is no longer interested in that one thing, then the employee is let go in favor of making room for someone new who has demonstrated the ability to do some other one thing.

The cycle continues with continual evaluation of a person’s value (in terms of income) in terms of a brand that gets attached to the individual instead of in terms of fact that the person has the innate capability to make a brand (a capability) in the first place. If the brand fades, it is incumbent on the individual do build a new brand (demonstrate a new capability) in order to recover a recognition.

From a perspective of motivation for participation in the workforce, the worker that tires of having his true human value ignored and replaced by a fixed-brand will choose to opt out and pursue a more human existence outside of employment, outside of the world of income.